It’s difficult to see through all the red ink, but President Trump’s proposed $4.38 trillion budget for fiscal 2019 contains consistent conservative policy solutions for the years ahead, such as beefing up the military and border security, trimming domestic spending across the board, containing the cost of most entitlement programs and slashing foreign aid.
After the next fiscal year, which begins Oct. 1, Mr. Trump would impose a “two-penny” rule on most domestic discretionary spending, cutting social programs by 2 percent per year, or two cents for every dollar spent. Over 10 years, the White House said, it would save taxpayers $1.5 trillion.
The president would curb the costs of Medicare, Medicaid and other entitlement programs except Social Security by $1.7 trillion over a decade, by giving states more flexibility to devise programs more targeted to the neediest citizens. He would cut $675 billion over a decade by repealing Obamacare, another entitlement program.
Cuts are proposed for food stamps and other welfare benefits, federal aid to education, and health care organizations that provide abortions. The budget would eliminate federal funding for public media.
Instead of granting all federal civilian employees an automatic pay raise next year, the White House is proposing to create a $1 billion fund for managers to give out performance-based pay raises. White House Budget Director Mick Mulvaney said more than 99 percent of federal employees currently get performance-based raises automatically.
All told, the president’s spending plan would cut about $3.7 trillion from projected deficits over 10 years. The blueprint assumes that economic growth will maintain a robust annual rate of 3 percent, but many analysts say that prediction is too rosy.
But because of the two-year spending deal reached last week that the president said is crucial to rebuilding the military, Mr. Trump’s proposed budget would cause the annual deficit to soar to $984 billion in fiscal 2019, up from $666 billion in fiscal 2017. Unlike last year, the latest spending plan doesn’t even try to balance the federal budget within 10 years.
“We’re going to have an incredible military,” the president said during a meeting with state and local officials. “No. 1, it means safety and security.”
Referring to projections of mushrooming annual budget deficits, the president said, “we may have very strong views on spending, which I have. But without the military, it’s possible there’s reason for us to be meeting.”
The president also referred to U.S. involvement in the Middle East over the past 17 years, including wars in Iraq and Afghanistan, as a $7 trillion mistake.
“But it is what it is,” Mr. Trump said. “This is what I took over.”
Mr. Mulvaney said the $1.5 trillion tax cut signed into law in December is also contributing to deficits.
“You’re going to see a spike in the deficit,” he told reporters. “You do have increased deficits for the first five years. Revenues are going down.”
But he said the strong economy and adhering to the administration’s cost-cutting proposals in the future should turn back deficits beyond that.
“We are not condemned to trillion-dollar deficits forever,” Mr. Mulvaney said. “There is a way out of this. But we have to take the spending side extraordinarily seriously.”
He noted that in last year’s budget, the administration suggested $54 billion worth of spending cuts to Congress. Lawmakers accepted $5 billion, he said.
Rep. Todd Rokita, Indiana Republican, acknowledged Monday that Mr. Trump’s budget request isn’t balanced but said it addresses the biggest drivers of debt for a long-term improvement.
“What the president’s budget request is doing here is going after the real drivers of our debt, and that’s the mandatory spending. And he’s doing it in a very humane way,” Mr. Rokita said on Fox News.
Rep. Joaquin Castro, Texas Democrat and a leader of the Congressional Hispanic Caucus, said the president’s budget proposal “perpetuates the Republican plan to cut taxes for the rich, intensify the budget deficit and demand cuts to programs that working-class Americans rely on.”
Independent fiscal watchdogs say the White House is too optimistic about projections for economic growth and about Congress’ willingness to impose budget discipline.
“The budget continues to include a range of overly optimistic assumptions, including highly unlikely cuts and growth projections that significantly exceed those of most other economists,” said Michael A. Peterson, president and CEO of the Peter G. Peterson Foundation.
“Today’s budget represents a dramatically worse outlook than what was released in May. Last year’s budget had worthy goals of balancing the federal budget within 10 years and lowering debt as a share of the economy to below 60 percent. This year’s version never balances the budget and adds $4.5 trillion more of new debt,” he said.
Justin Bogie, a senior policy analyst at The Heritage Foundation’s Roe Institute for Economic Policy Studies, said the budget deal will, over the next two years, raise the Budget Control Act caps by $296 billion “with only a third of that being paid for.”
“It would guarantee that about a trillion dollars is added to the debt this year and is an affront to any remaining hope of fiscal responsibility,” he said in a blog post.
The budget also proposes more than $23 billion for border security and immigration enforcement programs, including $18 billion over fiscal years 2018 and 2019 to build the southern border wall. It requests $782 million to hire 2,750 additional law enforcement officers and agents at U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement.
The spending plan also calls for $2.7 billion to pay for an average daily detention capacity of 52,000 illegal aliens at ICE, the agency’s highest-ever detention level.
The budget includes $200 billion in federal money over 10 years for an overall $1.5 trillion infrastructure rebuilding proposal. The federal dollars would leverage bigger investments by state and local governments, with Washington’s share of the spending offset with cuts elsewhere in the president’s fiscal 2019 budget.
The administration is requesting $85.5 billion in discretionary spending for the Department of Veterans Affairs, up from $77.7 billion in fiscal 2017, for medical care, counseling, homelessness programs and other services. The VA’s current overall budget is about $186 billion.
After Senate negotiators reached the budget deal late last week, Mr. Trump complained on Twitter that he had been forced to accept “much waste” in nonmilitary spending in order to get enough Democratic votes and secure a boost in military spending.
“That was one of things that really surprised him,” Mr. Mulvaney said of the president. “It’s a Washington, D.C., where we have to have Democratic votes.”
The White House budget director added, “I do think that spending a bunch of money we don’t have is wrong. This is the hand we’ve been dealt.”
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